Monday, June 1, 2009

Short J. Crew Group

Today I am looking at J. Crew Group, Inc. (NYSE:JCG). The stock surged Friday on better than expected earnings -- first quarter profit down by only 33 percent. It had a similar earnings surprise in March, (Q4 net loss 22 cents vs Street's 27 cents), and has been in an uptrend ever since. This time, however, I am betting history won't repeat. The stock at 30 something times trailing twelve month earnings is simply too rich. With some of the price pop apparently being due to short covering, I like this stock as a short. However, I am a speculator and am often wrong. Follow my lead strictly at your own risk.